The Costs, The Expats And The Middle East

The Middle East has always been an expat hotspot and has become more so over the last decade as cities have sprung up amongst the sand swept deserts of the UAE, Bahrain and Qatar. As an expat which cities have a high cost of living, which rank low and what hardships are there to face in these regions?

The United Arab Emirates has always been one of the most expensive countries to live in this region for expatriates, however Qatar has now this spot followed by the UAE, Israel, Iran and Lebanon. Cities with a high cost of living include Doha – first in the Middle East region and 122nd in the world; followed by Abu Dhabi, Dubai, Jerusalem and Tehran. The cheapest country and city is Sanaa in Yemen ranking at 711th.

The cost of living index for Doha is 89.04 compared to New York which has an index of 100, and Tokyo the most expensive city in the world, 139.89. Doha’s cost of living index is similar to cities such as Aberdeen, Munich, Brussels and Amsterdam.

It is the most expensive city in the Middle East mainly because it is a relatively small centrally controlled economy undergoing rapid growth with large-scale infrastructure projects. More than 80% of expatriates in Qatar live in Doha. Due to the limited number of suppliers of goods and services to the country, when there is a shortage of a product in one store, it is usually an indication that all shops will be out of stock. Most goods and services are imported at high costs. Added to the fact that salaries are reputedly the highest in the region (Nationals received a 60% salary hike in September 2011), the cost of living in Doha has increased relative to other cities in the region.

The following basket groups are particularly expensive in Doha: alcohol, communications, furniture and appliances, housing and meals out. Alcohol for home consumption is available for those with a liquor permit, from one shop supplying the entire country. A midrange bottle of wine is approximately $24, beer ranges from $2.50 to $4.50 for a premium beer. A monthly standard plan Internet subscription (4 Mbs) is $113, while the benchmark mobile tariff is $0.13 per minute. A Blu-ray player averages $145, and you will pay around $1,436 for a 46 inch LED HD TV. While housing has become more affordable since the shortages a few years ago, the benchmark rental for a secure up-market unfurnished apartment (3 bedrooms) is $4,448 in a central location, and $2,891 in a suburban location, per month, excluding utilities. Meals out in hotels are very expensive, but as in most cities more reasonable priced options can be found outside of the hotels and malls. Fuel is very cheap at just under $0.28 per litre, and vehicle prices are reasonable compared to most other parts of the world.

The biggest mover down the rankings is Manama in Bahrain, which has dropped to become the 277th most expensive location in the world, while the biggest mover up is Baghdad in Iraq, which has risen to be the 469th most expensive location in the world. Manama is 11% less expensive than Doha in terms of overall cost of living. In fact overall, Manama is only the seventh most expensive city in the Middle East. It is less expensive for the big-ticket items, which comprise a larger portion of an expatriate’s budget, such as housing and healthcare. A surprising result this quarter is that comparing the cost of living excluding housing, education, healthcare and transport actually results in Manama being marginally more expensive than Doha as it is slightly more expensive for clothing, groceries, recreation & culture, and meals out.

Baghdad is slowly recovering after years of hostilities. The economy still lacks effective economic policies. The weak state of the financial system, together with its limited role in the economy, also makes development the private sector difficult. Increasing demand for goods and services with a lack of regular supply is the main reason for the cost of living in Iraq rising.

The measure of the rankings covers 780 cities covering every country in the world, these are released every quarter with new data and measures the comparative cost of living for expatriates. The cost of 13 basket groups with over 140 items are compared in each location.